March 6, 2017

The “gig economy” — brace yourself for a new revolution

We are on the brink of such profound changes to our working life that we cannot begin to get our heads around it. The changes being referred to as the “gig economy” are just the very first signs of a radical change in the nature of work that will in time become a new industrial revolution.

John Marshall, Chief Strategy and Innovation Officer at Lippincott, spends his days working with experts to predict how the economy will function in future, and says that the world of work will change beyond recognition far faster than anyone expects. Unfortunately, it’s not good news for your job.

He suggests that rather than slotting neatly into a corner of the “real” economy, the “gig” economy is a sign of things to come. Instead of organizations being big businesses that own things, and employ hundreds of thousands of people, they will break up.

He says: “They will desegregate, so they don’t need employees, they can just have people log onto platforms and do tasks for them. People won’t work for one employer, they will work in six different places, and just do the things that add the most value.”

This isn’t happening overnight, but it is happening. Large corporations are working with specialists like Marshall to devise new profit models and structures in order to benefit from the new environment. He says: “Large companies are waking up to this, and seeing the value that is being created in new ways by companies operating in the ‘gig’ economy”.

Large companies are waking up and seeing the value that is being created by those operating in the ‘gig’ economy.

For employees it means job security will become a thing of the past, and everyone will become an entrepreneur of one. Instead of having a job, people will have a score. Marshall explains: “Technology is a scoring machine, so increasingly work will be rated, and people will be asked to complete tasks based on their score. People with the highest scores will be in the most demand, will have the most flexibility and freedom and will be paid higher rates. It will be up to everyone to keep on improving their scores.”

If this sounds like a dystopian future, Marshall offers some comfort. He points out that there are some jobs that technology and machines will be able to do better than humans in this new world, but there will still be jobs where human qualities are vital. People will still be needed for any role requiring empathy, comfort, and understanding.

The transformation of the economic landscape will make a mockery of current political obsessions, such as a minimum wage or whether freelancers actually qualify as employees. As boundaries are blurred, it will no longer make any sense to try to impose outdated structures on them.

Marshall says: “Politicians are incapable of understanding the impact of technology. Already the nature of jobs today is not reflected in the political sphere.” This is why new models of employment are coming up against so many legal challenges, as the authorities try to fit the new economy into an old-fashioned model.

In time, this will become increasingly futile, and politicians will have to start legislating for the new reality. The slightly less worrying news is that this will include putting in place a safety net for those people whose scores are not good enough to secure work, or who cannot compete in such a cut-throat environment.

Marshall says: “The speed of disruption means that jobs will be lost faster than they can be created, so the idea of a universal basic income makes a lot of sense.” This is an idea that has been growing in popularity and means everyone would be paid a basic income to do nothing. Those who choose to work can earn more, but those who cannot find work will be able to live off this income.

Article written by Sarah Coles and originally published in AOL Moneyon February 18, 2017.